Is Wal-Mart Really to Blame?

Is Wal-Mart Really to Blame?

WARNING - this article contains graphic and explicit language which may not be suitable for those who are not mature enough to think for themselves.

Well of course Wal-Mart is to blame - everybody knows that! They have gone around the globe to find the lowest prices for their consumers and they have brought variety and economy to their stores. As a result, the American public has flocked to them as if grateful for a chance to get rid of all of that nasty money.

In a sense Wal-Mart is only a continuation of the Silk Road traders, those camel caravans that crossed mankind's’ first “seas”, the great Asian and Middle Eastern deserts. They were followed by sailing fleets that traded Oriental goods and European goods. In the 1400’s Mercantilism developed out of the same process and rendered the value of everything into monetary worth and led to the development of colonialism, slavery, share cropping, the company store, and coal-miners’-daughters.

We now see the same concept moving into the construction industry. As the cost of private homes here in Franklin, NC rises from $120 through $200 a square foot, new alternatives begin to creep out onto the market stage. Besides doublewides, this market now includes manufactured homes, modular homes, and stick-builts which are produced at factories and assembled with labor brought in from outside the area, some of which comes from Mexico. Who is at fault here? The local contractors who charge $150 a square foot, or the new factory-contractors with their $80 a square foot price tag?

We want to support our local folks, of course. But - at $150 a sqft, a 1500 sqft home costs $225,000; the new guys will do that same home for $120,000. Or, that $225,000 you would pay for a locally built 1500 sqft house would buy you a 2900 sqft house with the new guys! There is no decision to be made here. The question frames its own decision.
So who’s to blame? How could it be the local contractors? They are just trying to build a family business and support other hardworking Americans. Of course the outside guys who come in here are only providing supply for a demand that is clearly being expressed by the public - how can we hold them at fault? Could it possibly be the public, for being too Mercantilistic and valuing everything in the concept of dollars?

(WARNING: Here is where it gets graphic, folks. No one who is incapable of mature thinking should read any further!)

Maybe it is just a failure of the market economy. Read on.
What has happened is that the income gap has widened to the point of unsustainability. More and more employees are working for wages that will not support them, much less buy $200,000 homes. Meanwhile, those who have good jobs are making more and more money, and becoming fewer and fewer in number. Two groups, which have always existed in every society before, and probably always will, the “have-nots” and the “have-a-lots” have come to inherit the entire economy. In America, in the past, both of them occupied a much smaller part, separated by a large middle class which absorbed people from the “have-nots”, and fed a fewer number of their members into the “have-a-lots”.

But now the American middle class is fading out of existence. It is becoming another of the endangered species. A great economic extinction is already in progress: corner groceries, hardware stores, neighborhood book sellers, along with cafés, butchers, ice cream parlors, hamburger grills, city newsstands, bakeries, locally owned florists, newspapers, radio stations, funeral parlors, banks, real estate offices and endless groups of others including mom & pop diners and restaurants, small industries, family farms and small fishing fleets, all these have been replaced by corporate capitalistic enterprises. Now it is the middle class.

The construction dilemma is similar to a Wal-Mart moving in to a small town. It is reminiscent of the arrival of MacDonalds’ chains. The local guys can’t compete for the public’s money at the prices these great corporations bring in to the community. Neither can the local farmers, they eventually have to sell out - usually at rock bottom prices to the same factory farm that has driven them out of business. They were middle-class but now are “have-nots”, and may even work for the “have-a-lots” who now have even more than they did before.

Why didn’t this happen in the past? Actually it did happen many times in the 18th and 19th century. Booms, busts and “panics” ran through a rapid succession of inflations and recessions, even depressions, until the late 1920’s when the Great Depression fastened itself upon the world. From there most governments around the world began to assert themselves over businesses and not just demand change, but dictated a new way of life to them. For the next 70 years, government regulated much of business, at least Big Business. Goods and services were provided in an increasing amount and the people who provided them made enough money in wages to buy the things they produced. A middle class developed and grew, and with it came a measure of predictability and security. As that middle class began to disperse, it was replaced by a new entity which masked the demise of the middle class and “stretched” it. That new class was the Credit Class. As the middle class was being replaced by a debtor society, the effect was muted because middle class people were able to “hang on” by increasing their debt - “for a short time”. Now, as we enter what President Bush proudly calls the Ownership Society, most middle class people really don’t “own” anything except a constantly increasing debt. Now as their pensions are evaporating, they are falling into the have-not group, and looking for a job at the factory farm.